The United Kingdom stands on the verge of a significant transformation in its financial services sector.
After years of discussion, the Financial Conduct Authority (FCA) is nearing completion of its consultation process to integrate cryptoassets into its regulatory framework fully.
Such a decisive transition from the chaotic early days of crypto adoption marks the beginning of a more mature, regulated environment designed to build institutional trust and enhance consumer safety.
Nick Jones, Founder and CEO of Zumo, views this not as a restriction but as a liberation for legitimate enterprises. “Policymakers clearly want this comprehensive regulatory regime to serve as a foundation for a thriving and competitive cryptoasset business ecosystem in the UK,”
Jones points out, emphasising the government’s intention to use regulation as a competitive edge rather than a barrier.
Steady progress in uncertain times
A key feature of the UK’s approach is its deliberate pace. Unlike some regions that rely on regulation-by-enforcement tactics, the FCA has followed a clear roadmap, enabling firms to prepare for upcoming changes. This predictability is invaluable for businesses planning their long-term strategies.
“As the FCA enters the final phase of its consultation and gathers feedback on applying Consumer Duty to crypto firms, credit must be given to the regulator for incorporating industry insights where offered,” says Jones.
He argues that the UK has successfully avoided the chaotic shifts that have troubled other markets: “The UK has benefited from a more systematic, phased, and predictable consultation process through the FCA’s crypto roadmap, in contrast to the more fragmented, enforcement-led approach seen in some other regions.”
Industry groups largely concur. TheCityUK, which represents UK-based financial and related professional services, has echoed this sentiment in the past, stating they “support the FCA’s efforts to apply appropriate Handbook provisions… aiming to establish a proportionate, risk-based, and consistent regime.”
A Contrast with the US: Clarity vs. Conflict
The value of the UK’s steady approach is most evident when compared to the current regulatory situation in the United States.
While the UK refines its framework, the US sector remains mired in legislative gridlock and legal conflicts.
Jones highlights recent turbulence across the Atlantic as a warning: “The clearly mapped timeline of consultation documents outlines the path to a regulatory regime that considers all stakeholders’ concerns. This will help us avoid the current stagnation seen in the US, where Coinbase’s decision to withdraw support for the CLARITY Act has sent shockwaves through the digital assets sector and risks undermining market structure reform.”
This refers to the heightened tensions in Washington, where industry leaders have opposed legislation they find unworkable.
As Coinbase CEO Brian Armstrong famously said about US regulatory proposals, “We’d rather have no bill than a bad bill,” highlighting the frustration with frameworks that fail to address the complexities of blockchain technology.
The UK’s collaborative approach aims to prevent such a deadlock.
Consumer duty: Setting a new standard
At the core of the UK’s new regime is the application of ‘Consumer Duty’ to crypto firms. This principle requires firms to ensure positive outcomes for retail customers, marking a significant shift from the cautionary “buyer beware” model of the past.
For Jones, this represents a pivotal moment for market maturity. “Businesses will now have clarity on what it means to operate a cryptoasset business in the UK; and consumers, for the first time, will have tangible investor protections and the assurance of dealing with regulated businesses held to the high standards of UK financial services.”
In practice, this levels the playing field. Crypto firms will no longer be outliers but will be on par with traditional banks and insurers in terms of conduct expectations.
“Practically, the changes introduced by this regime are profound,” Jones adds. “With greater certainty in law, in regulation, and in serviceable business, there has never been a better time for cryptoasset businesses to seize UK opportunities at scale.”
Ending the offshore era
The implementation of these rules marks the end of an era. The practice of serving UK customers from obscure offshore locations with minimal physical presence is coming to an end. The new framework demands substance, compliance, and accountability.
“But it’s also the end of an era: of offshore provision, of start-up style business processes, and of unregulated business models,” Jones asserts. “What’s now urgently needed is the UK-compliant infrastructure and the pathways to market that can accommodate new levels of operational obligations.”
Legal experts share this view in the field. As noted by legal partners at firms like Gunnercooke in recent industry commentaries, the “travel rule” and financial promotion regimes have already reduced the number of players, leaving only those committed to compliance.
The whole regime will likely accelerate this consolidation, favouring platforms that have invested in robust governance.
Infrastructure: The key to adoption
The final piece of the puzzle is infrastructure. While regulation sets the rules, the technology—the infrastructure—must also be upgraded.
For the UK to succeed as a crypto hub, it needs domestic infrastructure capable of meeting these stringent regulatory standards.
“That means developing the critical UK partner infrastructure to provide businesses of all types with continued access to the expanding UK cryptoasset market,” Jones concludes. “As the UK aims to establish itself as a crypto hub, we see this as the real bridge to integrating UK regulatory oversight and consumer trust with international competitiveness and connectivity to the global cryptoasset ecosystem.”
By combining strict oversight with open dialogue, the UK is betting that the safest market will eventually become the most liquid. If the FCA’s roadmap holds steady, 2026 may be remembered as the year crypto officially came in from the cold.